By Stuart Condie

SYDNEY--One of the top investors in Adani Group appears to be mounting a rearguard to protect its share price against the contagion from a U.S. investigation into the Indian conglomerate.

Australia-listed GQG Partners on Friday launched an on-market share buyback worth up to 100 million Australian dollars, equivalent to US$65.1 million, calling out the opportunity presented by the stock's sharp sell-off.

GQG shares tumbled 19% on Thursday, wiping almost A$1.5 billion off the asset manager's market capitalization after the U.S. Justice Department charged Adani's billionaire founder, Gautam Adani, in a bribery scheme. The stock rebounded 11% on Friday following the buyback announcement.

"We believe our stock is undervalued and this is a great investment opportunity. We have a strong balance sheet and GQG believes in the strength of its business," GQG CEO Tim Carver said.

"We're happy to buy our stock at these values."

Earlier this week, GQG said that less than 10% of client funds are exposed to Adani Group, which is one of India's biggest business conglomerates.

J.P. Morgan analyst Siddharth Parameswaran, who estimates the exposure at 8%, said Thursday's share price fall looked large at first glance.

"Although it is unclear if there will be any impacts on flows or questions on process relating to ESG-related considerations," Parameswaran cautioned in a note.

U.S. prosecutors on Wednesday announced a 54-page indictment alleging that Adani, the chairman of Adani Group, personally met with Indian officials to advance a massive bribery scheme to secure lucrative solar-energy supply contracts.

Prosecutors also alleged that Adani and two Adani Green Energy executives conspired to misrepresent the renewable-energy firm's antibribery and corruption practices to U.S. investors and financial institutions to obtain financing.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

November 21, 2024 20:56 ET (01:56 GMT)

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